Union Budget 2026 has introduced a wide set of Indirect Tax proposals. While a significant portion of the Budget speech focuses on Customs tariff rationalisation, exemption review and trade facilitation measures, the GST / IGST legislative amendments proposed through the Finance Bill, 2026 are limited in number but important in impact, primarily covering post-sale discounts, credit note linkage, refund rationalisation, interim appellate mechanism for advance rulings, and place of supply for intermediary services.
Accordingly, this article provides a clear, topic-wise summary of the GST / IGST law changes (Annexure B: B1 to B6) , with section references, "before vs after" position, and key practical implications for taxpayers and professionals. Please note that most GST changes will take effect from a date to be notified (as GST implementation requires coordination with States and GST Council recommendations), except where a specific effective date is expressly stated (e.g., 01.04.2026 for the interim appellate arrangement).
The relevant Budget speech extract/annexure is attached/reproduced for ready reference. If you have any doubt or query on applicability, documentation, or impact on your transactions, feel free to contact me at the details mentioned at the end of the article.
1) Valuation & Credit Notes (Post-sale discounts)
|
Topic |
What announced |
Before |
After / New position |
Section / Ref |
Key impact |
Effective date |
|
Post-sale discounts |
Remove the requirement of linking post-sale discount with an agreement; where ITC is to be reversed by recipient, link it through credit note mechanism |
Post-sale discounts generally required: (i) agreement at/before supply and (ii) linkage to relevant invoices |
Agreement / invoice-linkage requirement proposed to be done away with; credit note u/s 34 becomes the reference point where the recipient reverses ITC |
CGST s.15(3) (B1) |
Significant compliance easing for commercial rebates / incentives |
Date to be notified (GST Council + States) |
|
Credit notes |
Insert reference of s.15 in s.34 (alignment of valuation & credit note) |
s.34 did not expressly refer to s.15 |
s.34 updated to include reference of s.15 |
CGST s.34 (B2) |
Cleaner statutory linkage for post-sale discount credit notes |
Date to be notified |
2) Refunds (Section 54)
|
Topic |
What announced |
Before |
After / New position |
Section / Ref |
Key impact |
Effective date |
|
Provisional refund - inverted duty structure |
Extend the provisional refund facility to refunds arising out of inverted duty structure |
Provisional refunds not available for inverted duty refunds (as per proposal note) |
Provisional refund mechanism extended to inverted duty refunds |
CGST s.54(6) (B3) |
Faster cash flow for inverted duty claimants |
Date to be notified |
|
Refund threshold (exports with payment of tax) |
Remove the threshold of Rs 1,000 for the sanction of refund claims for export of goods with the payment of tax |
Refund not sanctioned if amount < Rs 1,000 (for this category) |
Threshold removed for this category |
CGST s.54(14) (B4) |
Small exporters get refunds without "below Rs 1,000" rejection |
Date to be notified |
3) Advance Ruling - Interim appellate arrangement (Advance Ruling Appeals)
|
Topic |
What announced |
Before |
After / New position |
Section / Ref |
Key impact |
Effective date |
|
Interim appellate arrangement pending National Appellate Authority |
Pending constitution of National Appellate Authority, Central Govt may empower an existing Tribunal to hear appeals u/s 101B; sub-sections (2)–(13) won't apply where such Tribunal is empowered |
NAA not constituted; gap in appellate route intended under the law |
Bridge mechanism created via new s.101A(1A) . Also an Explanation clarifies "existing Authority" includes Tribunal constituted u/s 109 |
CGST s.101A(1A) (B5) |
Continuity for appeals in advance ruling matters |
01.04.2026 |
4) IGST - Place of Supply for Intermediary Services
|
Topic |
What announced |
Before |
After / New position |
Section / Ref |
Key impact |
Effective date |
|
Intermediary services POS |
Omit the special rule for intermediary services |
POS deemed as location of supplier under s.13(8)(b) |
POS to be determined under default rule s.13(2) |
IGST s.13(8)(b) omitted ; s.13(2) applies (B6) |
Material impact for cross-border intermediary service providers (export characterization) |
Date to be notified |
The author can also be reached at varunmukeshgupta96@gmail.com
CAclubindia
